Unsatisfied Judgment Fund

DEFINITION of 'Unsatisfied Judgment Fund'

An amount of money set aside by certain states to cover uncompensated expenses related to bodily injuries sustained in motor vehicle accidents where the responsible driver is unable to pay for the damages. The unsatisfied judgment fund is used to help the injured and not-at-fault driver pay for medical bills related to the accident. In order to be eligible to receive assistance from the fund, the injured party must be able to prove that he or she was not at fault, and that they are unable to collect money from the responsible party.

BREAKING DOWN 'Unsatisfied Judgment Fund'

The unsatisfied judgment fund is intended to protect drivers from financial losses resulting from motor vehicle accidents for which they are not responsible. The responsible party may be unable to pay because he or she is insolvent or uninsured. Often, these state funds are financed by a small addition to the state's automobile registration fee. The fund pays unsatisfied judgments up to certain, fixed limits.

There can me penalties to the the driver who is determined to be at fault in the accident and who is unable to pay for damages. For example, the driver might lose his or her driver's license. Once the responsible driver pays back the money into the unsatisfied judgment fund, he or she may be eligible for a driver's license again.